Northland Power secures funds for 17-MW offshore wind demo

Northland Power Inc (TSE:NPI) has reached financial close for a 17-MW offshore wind demo project tied to the 252-MW Deutsche Bucht (DeBu) development in the German North Sea.

The Canadian power producer said today that all required funds for the two-turbine Deutsche Bucht Mono Bucket pilot demonstrator have been contributed by the company and committed by project lenders. This scheme represents the first time an offshore wind farm would test mono bucket foundations. The two additional turbines will increase the total capacity of the Deutsche Bucht plant to 269 MW and increase the total project cost to about EUR 1.4 billion (USD 1.62bn) from EUR 1.3 billion.

Northland Power noted that it will provide a total of USD 430 million (EUR 370.5m) from its existing cash resources, while the balance will come in the form of non-recourse project finance debt and from pre-completion revenues.

The main 252-MW offshore wind park is currently under construction and is expected to enter into service in the second half of next year. Both the demo and base plants will earn the same fixed feed-in tariff (FiT) subsidy -- EUR 184 per MWh for the first eight years and EUR 149/MWh for the following five years.

"The addition of the Demo turbines is not only innovative and accretive to the base project, but we are able to undertake this initiative with little additional risk since they will be integrated into the overall construction project," said John Brace, CEO of Northland Power. He added that this pilot project could help the company accelerate the construction process and reduce costs for certain site conditions.

(EUR 1.0 = USD 1.160)

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